CRYPTICS - world's first public crypto analytics based on AI

A rapid development in the cryptocurrency sector of economy within thelast couple of years has opened a large number of opportunities. It did notonly led to a new reliable and independent ecosystem of money transfers,but also provided ecient and creative alternatives to the classical methodsof economics. For example, initial coin o erings (ICOs) that appeared justseveral months ago is now a brand new and successful way of funding, whichmakes starting a real world business from a breakthrough idea more easythan it ever was before.The cryptocurrency market continues to grow without showing almostany signs of a slowdown, and when it faces obstacles it immediately ndsnew ways to overcome them. The reasons for that come from popularityof the new market, and the fact that the community it represent is highlydiversi ed in terms of skills and ideas. Unfortunately this market is still notvery ecient, and huge jumps in prices can occur in very short periods oftime. For this reason, the newcomers may be hesitant to join the market asthey rather prefer to avoid such risks. This is however vital to the growth ofthis sector. For example, the more stable the market is, the more people areattracted to use it as means to invest their money into the projects that seekfor the crowdfunding via ICOs. The world has seen quite some successfulcompanies which were initiated through the crowdfunding and now theirservices are appreciated by a lot of people all over the globe. This is especiallyimportant nowadays when old methods, such as quantitative easing and atmonetary policies, are not as ecient in helping the growth of the worldwideeconomy. On the other hand, if the market is more ecient, it means thatICOs can priced more fair, which further helps analyzing their success andwill later lead to easier assessment of which projects to support. For thisreason, at CRYPTICS we believe that stabilization of the cryptocurrencymarkets and making them more ecient will attract more people, which isto the mutual bene t.One way to tackle the problem of the market eciency is to provide asupport for those market participants, who take the risk of drastic changeson the market and provide liquidity on exchanges and a safety cushion forthe retail investors. We believe in the power of diversi cation and healthycompetition, so we envision a platform where such traders can provide theirservices and evolve in order to solve the market stability problem together.It takes however a high level of speci c knowledge and years of experiencein order to get a good understanding of the trends in any new markets, soquali ed specialists in the cryptocurrency trading eld only start to appear,their approach is often somewhat scattered and can be more systematic,

which makes it challenging for them to form reliable predictions. We atCRYPTICS plan to help with this by advancing a forecast algorithm that canbe further used in trading cryptocurrencies.

Concept

CRYPTICS is dedicated to provide connections between investors (retail andprofessional), traders and the academic community. The concept is depictedon Fig. 1, and is outlined below.

Figure 1: CRYPTICS concept visualization.

As a rst step we nalize the CRYPTICS algorithm that is focusedon predicting changes in prices of cryptocurrencies (including the ICOtokens) both with respect to the at currencies and to each other.Due to the fact that cryptocurrency markets are very new, the factorsthat drive the prices are coming from very di erent sources, so thealgorithm uses method of Arti cial Intelligence (AI) such as MachineLearning (ML), and speci cally Deep Learning (DL), in order to com-bine quantitative (e.g. prices) and non-quantitative (e.g. news) datato come with a stable and reliable prediction. The collection of data

and its processing occurs is done real-time, and leads to predictionstime horizons ranging from minutes to days. This predictions can beused by any customer of the CRYPTICS platform either for private pur-poses (personal investments), or to build a trading strategy and createa small fund on this platform. At CRYPTICS we plan to cover the gap between the knowledge and cap-ital by providing traders with an opportunity to run their strategies onthe CRYPTICS platform. To their bene t will be the exchange connec-tivity infrastructure (including fast and stable lines), easier access tothe forecast results (so they can be used in their trading strategies),and access to the capital of our customers. Namely, as a customer youcan both buy a forecast to make your personal investment in a par-ticular cryptocurrency, and invest in a diversi ed strategy developedby one of the traders. This trader will hence build his own privatefund, and act as a fund and portfolio manager for those who supportedhim with their capital. At CRYPTICS we highly welcome any kindsof investment strategies: their pro tabilities and risk pro les (Sharperatio, drawdown, tail risk etc.) will be outlined for the customers tochoose from. Yet, since we particularly value stability of markets andbelieve that liquidity provision is vital for that, the strategies that havethis focus will get bene ts from our side. Our customers will have apleasure to enjoy this as a recommendation system: once they havestarted investing in some strategies, they will be provided with adviceson which new strategies seem to t their risk pro le. In CRYPTICS we believe that it is important to relate to the academiccommunity, by connecting the breakthrough research with the practicalconsiderations. In particular, we plan to organize contests dedicatedto solve AI and data problems appearing when advancing our forecastalgorithm, trading platform and in the overall cryptocurrency sector ofthe economy. Those contests o er monetary prizes for the best solu-tions, and will entail both closed and open-source results.3 MotivationThe introduction section outlined main factors in the motivation for the needto create CRYPTICS . Let us now go over the most important ones of themin a greater detail: Rapid development rates of the cryptocurrency market. In just a fewyears it has grown thousands times and its capitalization for today is

more than 140 billion dollars. One can see from the historical data howthe capitalization of Bitcoin market has grown (see Fig. 2) and how theprice of one Bitcoin has increased (see Fig. 3).

Bitcoin market capitalization trend.

Bitcoin market price trend. Increase in the number of miners, cryptocurrency traders and othermarket participants. The current number of unique active users of

cryptocurrency wallets is estimated to be between 3 million and 6 mil-lion. All of them can bene t from accurate forecasts, reliable analysisto generate pro ts and ecient markets. High volatility of the market where moves of more than 20 % or moreper day are not uncommon. This emphasizes the need for more accurateforecasts. For comparison: gold volatility is about 1.2 %, whereas formajor currencies it is from 0.5 % to 1 %. At the same time, highvolatility also means high potential pro ts and hence an strong interestfrom retail investors. Just in the rst two quarters of 2017 prices ofEthereum and Bitcoin in dollars have increased by 3500 % and 165 %respectively (see Fig.)

Figure 4: Performance year-to-date for the top 2 digital currencies versustraditional assets. Availability of a huge number of data sources for the extensive marketanalysis: the same currency pair can be traded at the same time on amultitude of exchanges. The number and the volume of transactionsis growing fast. For example, a year ago the number of transactionswith Ethereum was about 50 thousand per day, whereas today it ismore than 300 thousand (see Fig. 5). The volume of transactions withBitcoin a year ago amounted to about $ 160 million a day, and todaymore $ 1.4 billion a day (see Fig. 6). Increase in the number of cryptocurrencies for investment. Today thereare more than 1000 cryptocurrencies in the world, and the number ofnew cryptocurrencies is growing more than 3 times a year. Increase in the number of ICOs as a new way to raise funding. Com-paring 2016 versus the rst three quarters of 2017, number of ICOs

Ethereum transaction trend.

Transaction volume of Bitcoin in USD per day.went up more than 3 times to 154 and the volume invested more than20 times to more than $2 billion. Strong interest from banks and other major nancial institutions suchas MasterCard. Bank of Tokyo-Mitsubishi UFJ (the largest bank inJapan), the Central Bank of Canada, the People's Bank of China andsome other central banks have reported an intention to issue their owncryptocurrencies in the near future. Even Goldman Sachs received apatent for the settlement and clearing system SETLcoin based on theirown cryptocurrency. Absence of a similar analytical platform in the market of cryptocur-rencies. Along with the usual services of providing historical data and

short-term forecasts based exclusively on such data, CRYPTICS o ersa number of qualitative di erences and advantages:{ The forecasts of other platforms are often short-term, and henceare used to manage private funds, rather than to provide informa-tion to a wider range of users.{ Other platforms mostly take into account only quantitative mar-ket data, while the CRYPTICS platform takes into account datafrom several important sources including social networks, macroe-conomic indicators, opinions of leading analysts, etc.{ CRYPTICS will not only have a leading team of data scientistswith strong AI skills, but also will provide a platform for con-tests where academicians can try tackling practical problems inML and DL within the fast developing and challenging area ofcryptocurrencies.{ CRYPTICS will provide its trader customers with an infrastructurefor the decentralized creation of private funds.

Platform functionality

Analysis

The analytical component of the CRYPTICS platform has the following char-acteristics:

Key factors will be collected from multiple data sources, and provide an optimal number of quantitative indicators to evaluate the cryptocur- rency selected by a customer.

The provided data shown by indices with the probability of in uence on the market and on separately selected cryptocurrencies. In other words, the user gets aggregated data with maximum insights.

Global indicators, such as total market capitalization, number of cur- rent coins available for bidding, number of active markets, total sales volume and the percentage of market capitalization for selected cryp- tocurrencies, are meaningfully tied to the events and moods of market players: users, traders, investors, miners and developers of cryptocur-rencies. Thus, the system provides the user with not just raw numbers, but the history and meaning of events associated with them

In the user's account, the user will see the results of trading and the eciency of forecasts, as well as what data was used to compile manual,

semi-automatic and automatic portfolio transactions for the selected period.

-The forecast of changes of the main market indicators for the selectedcryptocurrency is built on the stream of data from the entire marketand represents a powerful and reliable tool for constructing an indi-vidual portfolio of cryptocurrency for trading or investment purposes.To distinguish media noise from key events and interpret them in thecontext of changing courses, building reliable forecasts for the interestof each CRYPTICS user is one of the main tasks of the project.

- The quality of forecasting grows with every forecast, transaction, anysignal on the market and in the community due to the built-in machinelearning algorithm that collects information and compares it with pre-vious forecasts.

Funds

- The next step is the possibility for users to create private funds to getcapital support from investors, and manage these funds or just theirown portfolio in order to increase pro ts.

- Each user can publicly open his portfolio, as well as share it with otherusers, while earning a percentage of the pro ts from transactions madewithin this portfolio as a reward. Each user will have a set of prede ned portfolios that will automaticallyhold key indicators through analytics and forecasts in real time.

- CRYPTICS provides its users with an infrastructure for the decentral-ized creation of private funds. Management of these funds will be ina semi- or automatic mode, taking advantage of all the features of theanalytical platform, including forecasts built on the AI algorithms ofthe system.

The mechanism of CRYPTICS token

Token CRYPTICS (CRP) is released on the basis of Ethereum. The CRP To-ken can be purchased when exchanging it for ETH, BTC, WAVES and othercryptocurrencies, as well as for USD, EUR and RUB. Any CRP owner canexchange it for a forecast for a particular transaction with a cryptocurrencyor for other services provided by the platform. As an additional functional,CRYPTICS plans to make CRP the transaction currency between traders thatopen private funds on CRYPTICS and their investors. Not only this makesCRP fairly unique in its functional among other tokens, but also is likely tomake it one of the most fairly price cryptocurrencies.

CRYPTICS monetization concept

CRYPTICS revenue is planned to come from several separate sources whichare grouped into the following three streams: direct revenue, indirect revenueand community-related revenue. Their visualization is provided in Fig. 7, andthe consequence section contain the detailed description of all three streams.

Three streams of the CRYPTICS monetization concept

CRYPTICS direct revenueThis revenue stream focuses on the core business of CRYPTICS .

Direct revenue from the platform.

Architecture

CRYPTICS platform consists of di erent modules, responsible for prescribedtasks (described below), which combined represent the unique product. TheCRYPTICS model platform is schematically presented in Fig. 12.Data collectionThe rst task of CRYPTICS is to collect real-time data that a ect the cryp-tocurrency market or contain information about its current and forthcomingchanges. The main sources of data collection are as follows: Cryptocurrency exchanges Ocial cryptocurrencies websites News portals, forums, related social network accounts and messengergroups Actions of the best traders and investors

Data Storage

The collected and marked data will be stored in the data lake. The taskhere is to organize the repository in such a way as to make it possible torepeatedly update information in real time, append features, training andtune model. We are going to use here some best in the class database.Feature Engineering and Data preprocessingThe most complicated, and in the same time, the most important part of ourmodel. Therefore, CRYPTICS will use a variety of input sources and nancialand quantitative models to calculate features and extract features from news.This is our know how where we select, extract, clean, transform data intofeatures that summarize the information content necessary for pricing, and nally create tensor for our model.

Prediction model

CRYPTICS model will generate forecasts for di erent time periods based onaforementioned numerous sources. The outcome will be a predicted proba-bility of the move direction and the expected value of its size, together withthe accuracy estimates. The comprehensiveness of the input data and thepredictions is one of the main advantages of using CRYPTICS , in contrast toa simple analysis of one or more data sources, or existing information panels.On a cold start we can already guarantee the prediction accuracy of 64% oneday ahead, which we are aiming to improve up until 75% for the hot start.

Platform visualization

Here we present prototype interface snapshots of CRYPTICS platform.

SWOT

The strong and weak side of CRYPTICS platform are shown in the strengthweakness opportunities and threats (SWOT) table below.

Budget

The preliminary budget allocation is presented in the table below.

RoadMap

December 2016

Idea and research

- Development of the Cryptics idea

- Research work

- Data collection

Q1-Q2 2017

Start of the development

- Testing the mathematical models

- ML&DL testing on collected data

- First forecasts

- Adding the news and social data sources

- Team hiring

- AI conception

Q3-Q4 2017

ICO

- Token and wallet development on Etherium basis

- Enlarge the team with experts in ML&DL, UX, Marketing, Business Development

- Prepare ICO (Whitepaper, Website, Marketing)

- PreICO in Nov. 2017

- Hello World for the MvP in Nov. 2017

- ICO in Dec. 2017

2018

Production

- AI development for forecast improvements

- Launch portfolio feature

- Marketing activities over the world

- Attracting AI experts groups on a competitive basis

- Cryptics tokens as payment for forecast service

2019

Automatization & funds

- Full bot's integration for all market transactions

- Development of the decentralized funds infrastructure

- Automatically portfolio management based on KPI forecast

Q1-Q2 2020

Expand

- Full version is ready and starting next level of development

- Adding more real-time signals from media to increase the speed of forecasts to real world meanings

- Over 30 000 transactions per month based on forecasts

Q3-Q4 2020

Decentralized funds

- Launch of the dezentralized funds managed by Cryptics users

- Based on AI forecasts and auto-management

- Earning on forecasts, fund infrastructure and marketing for the funds

Token Production

Fundraising and release of CRYPTICS tokens is intended to nance the de-velopment of the platform, the functionality of the self-learning part of theplatform based on AI, as well as the development of a decentralized systemfor the collection and updating of data. In addition, part of funds will beused for marketing e orts and advertising the project. CRYPTICS tokens willbe used to pay for any services that the platform has. A total of 82.000.000CRYPTICS tokens (CRP) will be provided:

* 50 million CRP will be sold from presale till ICO* 30 million CRP will be reserved for the team, partners and advisors* 2 million CRP will be reserved in the fund of company for future andused solely for development of CRYPTICS . Frozen Tokens will be grad-ually unlocked in the years 3-5 after the token sale

TeamThe CRYPTICS team has more than 5 years of experience in the eld of an-alytics and IT technologies, experience in working with Big Data, Analyticsand ntech technologies, as well as 4 years of machine learning experience.General team of the project - 9 people. Key team members:Stanislav Maer, CEO. Since 2008, he has created and launcheda number of online projects, including a contextual advertisingsystem, an international marketplace, and an analytical tool forwebmasters with built-in machine learning. Has experience inbuilding IT projects and their introduction to the market in morethan 45 countries around the world. Has more than 5 years ofexperience in online marketing and data analytics in retail. Afterthat, several online stores were launched. Interest in blockchainand cryptocurrency technologies arose in 2013. Has experiencein applying technologies in retail and accounting, as well as inmining. In 2016, sold the portfolio of online stores, and focusedon the CRYPTICS projectOleg Tereshchenko, CEO: Businessman. Since 2011, he hascreated and launched a number of online projects, among thema task manager, an analytical tool for webmasters with built-inmachine learning, and a telemedicine project. Management, op-timization and construction of business processes using IT tech-nology and data analysis led to the eld of machine learning andsmart contracts. Interest and study with practical experience ofcryptocurrencies arose in 2012. In 2016 he focused on the CRYP-TICS project. .Maxim Maslennikov, CTO. Technical Director. Programmingand managing commercial projects based on C/C++ and Python.Machine learning & deep learning specialist. For more than 15years he has been engaged in the architecture of system centers,for 20 years he advised corporations in the eld of machinelearning and IT systems. He participated in numerous projectsin the eld of arti cial intelligence.20Ilya Tkachev, Head of R&D. Mathematician and Quant Trader.Since 2008 was trading personally on conventional exchanges, from2014 professionally, as a member of the top market maker com-pany. Believes that open and ecient markets with a multitude ofplayers provide bene ts for the overall economy and help avoidingtoo rigid regulation, which is now vital especially for the cryp-toeconomy. Holds M.Sc. in Financial Mathematics and nishes aPhD in Probability and Statistics. During the course of his PhDsuccessfully participated and led numerous research projects withapplications in Economics, Systems Biology and Robotics.Yaroslav Khomenko, Data Scientist. Since 2015 - data analystin several large online projects in the eld of retail and analyt-ics. Worked with Adobe Analytics, Google Data Studio, WatsonAnalytics, Microsoft Power BI, Tableau. Data collection via webscraping, used numerous APIs. Experience in programming andmanaging automated betting systems in contextual advertising.Analysis and management of price strategies, development of au-tomatic strategies for managing the price portfolio. Programmingon R and Machine Learning in Python. Since early 2017 - datascientist in the project CRYPTICS .Andrew Bern - Investor-analyst, asset manager in the marketof crypto-currencies. Has extensive experience in the ICO eld,invested in many successful projects. Thanks to the accumulatedknowledge, he determines with high accuracy the perspective ofprojects on blockchain and cryptocurrency technologies. Since2016, he has also begun to promote and advertise projects at theICO stage, and thanks to the experience of a successful investor,he carries out no less successful advertising campaigns. He par-ticipated in the launch of the ICO and the successful launch ofmany projects on the market. 2017 was invited to participate inthe promotion and advertising of the CRYPTICS project.

Team

The CRYPTICS team has more than 5 years of experience in the eld of an-alytics and IT technologies, experience in working with Big Data, Analyticsand ntech technologies, as well as 4 years of machine learning experience.General team of the project - 9 people. Key team members:

Stanislav Maer, CEO. Since 2008, he has created and launcheda number of online projects, including a contextual advertisingsystem, an international marketplace, and an analytical tool forwebmasters with built-in machine learning. Has experience inbuilding IT projects and their introduction to the market in morethan 45 countries around the world. Has more than 5 years ofexperience in online marketing and data analytics in retail. Afterthat, several online stores were launched. Interest in blockchainand cryptocurrency technologies arose in 2013. Has experiencein applying technologies in retail and accounting, as well as inmining. In 2016, sold the portfolio of online stores, and focusedon the CRYPTICS project

Oleg Tereshchenko, CEO: Businessman. Since 2011, he hascreated and launched a number of online projects, among thema task manager, an analytical tool for webmasters with built-inmachine learning, and a telemedicine project. Management, op-timization and construction of business processes using IT tech-nology and data analysis led to the eld of machine learning andsmart contracts. Interest and study with practical experience ofcryptocurrencies arose in 2012. In 2016 he focused on the CRYP-TICS project.

Maxim Maslennikov, CTO. Technical Director. Programmingand managing commercial projects based on C/C++ and Python.Machine learning & deep learning specialist. For more than 15years he has been engaged in the architecture of system centers,for 20 years he advised corporations in the eld of machinelearning and IT systems. He participated in numerous projectsin the eld of arti cial intelligence.

Ilya Tkachev, Head of R&D. Mathematician and Quant Trader.Since 2008 was trading personally on conventional exchanges, from2014 professionally, as a member of the top market maker com-pany. Believes that open and ecient markets with a multitude ofplayers provide bene ts for the overall economy and help avoidingtoo rigid regulation, which is now vital especially for the cryp-toeconomy. Holds M.Sc. in Financial Mathematics and nishes aPhD in Probability and Statistics. During the course of his PhDsuccessfully participated and led numerous research projects withapplications in Economics, Systems Biology and Robotics.

Yaroslav Khomenko, Data Scientist. Since 2015 - data analystin several large online projects in the eld of retail and analyt-ics. Worked with Adobe Analytics, Google Data Studio, WatsonAnalytics, Microsoft Power BI, Tableau. Data collection via webscraping, used numerous APIs. Experience in programming andmanaging automated betting systems in contextual advertising.Analysis and management of price strategies, development of au-tomatic strategies for managing the price portfolio. Programmingon R and Machine Learning in Python. Since early 2017 - datascientist in the project CRYPTICS .

Andrew Bern - Investor-analyst, asset manager in the marketof crypto-currencies. Has extensive experience in the ICO eld,invested in many successful projects. Thanks to the accumulatedknowledge, he determines with high accuracy the perspective ofprojects on blockchain and cryptocurrency technologies. Since2016, he has also begun to promote and advertise projects at theICO stage, and thanks to the experience of a successful investor,he carries out no less successful advertising campaigns. He par-ticipated in the launch of the ICO and the successful launch ofmany projects on the market. 2017 was invited to participate inthe promotion and advertising of the CRYPTICS project.

Alexey Voronetsky - Since 2007 has been creating websites,SEO-optimization, Aliate marketing, working with CPA net-works and arbitrage trac. There are experience in setting upadvertising campaigns and end-to-end online analytics. Since 2011he works at the International Integrator Company NetCrackerTechnology Corp. He participated as a business analyst, a migra-tion analyst in implementation projects for telecommunicationscompanies such as NTT DoCoMo, Deutsche Telekom, MacedonianTelecom, Claro, Maxis, Andorra Telecom, Telefonica Ecuador. In-terest in blockchain and cryptocurrency technologies appeared in2015. Since 2016, he has been starting his hand at trading and isdeveloping in this direction. Has funds in the Trust Managementfrom several investors. Middle 2017 he has joined the CRYPTICSteam.

Sergei Holmeckis supports CRYPTICS as consultant andadvisor in the area of business development and nance. Sergeihas track record of delivering international projects in thetelco industry and brings over 8 years of experience in versatileanalytical roles, management consulting, transformation projectsand profound experience in the realm of outsourcing and sharedservices.